How to Overcome Financial Stress

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Financial Stress

Don't let financial stress keep you down

According to annual surveys by the American Psychological Association, finances have consistently topped the list of significant causes of stress for years. Even before the Great Recession, over 70% of Americans surveyed repeatedly listed money as their number one cause of stress.

Over the past couple of years, the financial picture for many here in the United States as well as around the world has become increasingly bleak. Many have lost jobs or continue to fear a loss of income due to the economy.

This added stress shows up in many ways, such as irritability, depression, muscle tension, back and shoulder pain, digestive disorders, and insomnia. It can lead to dependence on comfort foods, caffeine, alcohol, and drugs. And that’s just the start. In the long run, prolonged stress will literally shorten your life.

Defining the Disconnect

Stress is often caused by a disconnect between expectations and reality. We feel out of control of our circumstances. Let’s take a quick look at how this leads to financial stress.

We might expect to have a steadily increasing stock portfolio, a comfortable retirement nest egg, and a secure source of income. The reality may be that you recently lost half the value of your portfolio, a comfortable retirement is no longer possible in the immediate future, and the company you or your spouse works for just announced another round of layoffs — and your sole source of income is on the line.

The truth is we’re not always going to have control over every aspect of our circumstances. But we can always choose how we respond to our circumstances. The following tips will help you navigate the difficulties of financial stress and come out better on the other side.

Take Charge

Nothing helps us feel more in control of our circumstances than taking proactive steps to improve it. Setting goals is an important part of this process as it helps us focus on what we actually can do. Any kind of goal, whether financial, fitness, personal relationship, or any other purpose, should have certain characteristics for improving your odds of reaching it.

One of the most helpful mnemonics I’ve run across for setting well-defined goals is SMART. Depending on who you ask, the letters in SMART may vary a bit, but I use Specific, Measurable, Attainable, Realistic, and Time-Bound. Let’s apply this goal setting process to take control and reduce your financial stress.

Specific

Specific goals are clearly defined. Instead of “I want to have more money,” you might use “I want to have $10,000 cash on hand in my bank account.” Financial goals don’t always have to directly involve money. They may include making yourself more valuable to an employer or your own business. For example, you may “Complete XYZ course” to improve your business skills in an area.

Measurable

I already alluded to this in the last section. Dollars are measurable. “Lots of money” is not. Many financial advisors suggest keeping at least 3-6 months worth of expenses available in savings. But instead of writing down “I want six months of expenses in my bank account” take out your calculator and figure out the actual number. Put a value on it. If you have no income, then your goal may be to make a certain number of business or job contacts per week. Again, those are measurable and fully within your own control.

Attainable

Are you capable of achieving your goal? This aspect of goal setting really comes down to your personal mindset. If, deep down, you really don’t believe you can hit your goal, you’ll never strive for it like you should. So be sure your goal is one you believe is at least possible to accomplish. On the other hand, don’t shoot so low that nothing changes.

Realistic

While “attainable” focuses on your mindset, “realistic” focuses on circumstances. It may be realistic through savings and/or increased earnings to add an extra $1,000 per month to your savings account. But if you’re currently living out of your car with zero income, it’s probably unrealistic to set a goal of saving $1 million dollars this year. And for the record, basing your financial plan on winning the lottery is also unrealistic.

Time-Bound

The primary difference between a dream and a real, live goal is a timestamp. “Someday” never comes. But November 1st or December 31st does. Set a deadline by which you intend to accomplish your goal. This also helps you break the accomplishment of your goal down into manageable chunks. If you intend to save $12,000 in the next year, you can break that down to saving $1,000 per month or $231 per week. Then get started!

Examples of SMART financial goals

Find a new job in 30 days: “I will personally speak to, by telephone or in person, ten contacts each business day for the next four weeks.”

Specific: personally speak to contacts, by telephone or in person
Measurable: contacts: ten each business day
Attainable: yes, with some focused effort
Realistic: yes (with the Internet, even those in the most rural areas can work remotely), and making 200 appropriate contacts (10 contacts x 5 business days/week x 4 weeks = 200 contacts) should yield a reasonable chance of a job offer
Time-bound: 30 days to find a job — that’s within the four weeks

Increase savings account balance by $3,000 over the next year: “I will deposit $60.00 from each weekly paycheck into my savings account for each of the next 50 weeks.”

Specific: make a deposit into savings account
Measurable: dollars: $60 each week
Attainable: yes, through savings discipline
Realistic: yes — almost anyone not utterly destitute can save $60/week by cutting back on non-necessities such as cable TV, eating out, etc. — how important is your goal?
Time-bound: 1 year (50 weeks achieves your goal two weeks early)

Low-Cost Stress Relief

Taking proactive steps to improve your finances can go a long way towards alleviating financial stress. Still, you’re bound to have moments of stress and tension whether from money worries or other causes. Here are some proven low-cost stress relief techniques you can try:

Exercise

Physical activity burns off stress chemicals and can be more effective than Prozac at treating depression. Swimming, bicycling, or even brisk walking are all excellent stress-relieving activities you can start today with little or no out-of-pocket expense.


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This article first appeared in our monthly print newsletter, Get Healthy & Fit®.

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Aromatherapy

Essential oils like Lavender,Orange, Juniper, and Sweet Marjoram are proven to reduce feelings of anxiety. Aromatherapy oils can be used during massage (foot massage doesn’t even require a partner) or added to a warm bath to relax in. Starter aromatherapy kits with oils selected especially for stress relief can be found for under $20.00.

Laugh More

Laughter reduces stress hormones in your body, yet adults laugh an average of only 17 times a day. Find ways to bring laughter back into your life. Watch a funny movie, read the comics or play a fun game with friends.

Form a New Perspective

Finally, and this may sound cliché, there are still starving kids inAfrica. Many have no parents, and literally don’t know if or when they’ll eat again. Meanwhile, here in theUnited States, it’s rare to read about anyone starving to death.

Now I’m not minimizing the plight of the homeless (in fact, we have given thousands of dollars to Habitat for Humanity). But the fact remains that citizens of Western nations reduced to living out of their car or under a bridge typically enjoy better circumstances and opportunity for recovery than those starving children.

My point? Even if we truly hit “rock bottom” chances are the sun is still going to come up in the morning for us. We can still enjoy the best sunrise money can buy.

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